November 05, 2014
On October 7, 2014, the Michigan Court of Appeals approved for publication its opinion in William Stone v Auto-Owners Insurance Company ___ Mich App___; ___ NW2d ___ (10/7/14), holding that where a non-resident relative is the owner/registrant of a vehicle listed on a No-Fault policy and is a listed driver on the policy, but is not a “named insured” on that policy, the non-resident relative is not entitled to No-Fault benefits unless the policy language specifically expands the meaning of “insured”.
In Stone, William Stone, as the widower of Stephanie Stone, filed an action for survivors’ loss benefits against Auto-Owners pursuant to MCL 500.3108 and 3114. At the time of her death, Stephanie Stone was driving a 2002 Ford Taurus that she owned and registered. She did not, however, procure insurance for the vehicle. Rather, William’s parents, John and Linda Stone, listed William and Stephanie as drivers under their policy with Auto-Owners and added the 2002 Taurus the year before the accident in question.
On appeal, the Court of Appeals explained that “person named in the policy” under MCL 500.3114(1) is synonymous with “named insured” and persons designated merely as drivers under a policy are not “persons named in the policy.” Therefore, William was not entitled to No-Fault benefits under MCL 500.3114(1). The Court also found that William was not entitled to benefits under MCL 500.3114(4). Section 3114(4) allows vehicle occupants to claim benefits from the insurer of a vehicle’s owner, registrant, or occupant. William argued that Stephanie would have been entitled to benefits under §3114(4) because she was the owner, registrant, or occupant. William argued that Stephanie would have been entitled to benefits under §3114(4) because she was the owner, registrant, and operator of the Taurus at the time of her death, and Auto-Owners was her insurer under the policy. The Court noted that William was not able to point to any portion of the insurance contract that expanded the scope of “named insured” to cover Stephanie and therefore, where the policy did not extend coverage to persons other than “named insureds”, Auto-Owners was not an insurer of Stephanie.
William also argued on appeal that Auto-Owners should be estopped from enforcing the policy as written because Linda Stone believed that she was taking out a policy in Stephanie’s name but did not receive the policy as described to her when she purchased it. The Court found that William’s pleadings were not sufficient to support this argument, and regardless, the argument would fail regardless because: (1) “a policy holder cannot be said to have reasonably expected something different from the clear language of the contract”; (2) the policy language was not ambiguous; (3) neither William nor Stephanie were parties to the insurance contract and so could not obtain reformation of that contract; and (4) any representations made in this case were made to Linda Stone (a non-party to this action) by the independent insurance agent acting as an agent of Linda Stone, not Auto-Owners.
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Daniel S. Saylor
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David Campos, selected as Best Lawyers’ 2015 Grand Rapids Personal Injury Litigation – Defendants “Lawyer of the Year”.
Peter Worden, Jr., selected as Best Lawyers’ 2015 Northern Michigan Insurance Law “Lawyer of the Year”.
Garan Lucow Miller, P.C., has received a Tier 1 ranking in the 2014 edition of U.S. News – Best Lawyers “Best Law Firms.”